Source: AFP
The heads of the World Bank and International Monetary Fund (IMF) yesterday assured developing countries that their needs would not be forgotten in efforts to tackle the financial crisis.
Picking up on complaints that the crisis will put recent hard-won economic gains in the developing world at risk, World Bank head Robert Zoellick insisted that this would not be allowed to happen.
“Developing countries… risk very serious setbacks to their efforts to improve the lives of their populations from any prolonged tightening of credit or a sustained global slowdown,” Zoellick told a news conference.
“We must… ensure that as governments and publics turn their attention to problems close to home, they do not step back from their commitments to boost overseas assistance to meet the Millennium Development Goals,” he said.
IMF head Dominique Strauss-Kahn said “the financial crisis adds a crisis to a crisis (of rising food and energy prices in poor countries)”.
“We should not forget this other crisis,” he told the news conference after a meeting of the World Bank and IMF’s Development Committee which advises the two bodies on economic development issues.
Earlier, several developing country representatives told the committee they faced serious additional challenges if their concerns and needs were downgraded or forgotten as the rich nations focussed on their own problems.
The poorer countries could be hit twice by the crisis – finding it more difficult to get access to funding and as their exports fall as the crisis undercuts demand, Indian Finance Minister P Chidambaram said.
Worse still, the banking system in poorer countries could face volatility because of links with banks in the developed world which have been pushed to the brink by the crisis destroying their capital.
Zoellick told the news conference that the International Finance Corp, the private sector lending arm of the IMF, was exploring the possibility of a fund to help recapitalise banks in the developing world.
With donor aid programmes under pressure due to the financial crisis, the World Bank estimates that up to 100 million people are at risk of falling into poverty because of higher food and energy prices.
The 185-member IMF and especially the World Bank are tasked with aiding development and their annual meetings normally devote much time to reviewing progress made and new programmes.
This year, however, they have been overshadowed by the financial crisis, with a major summit of eurozone leaders in Paris yesterday to follow up a Group of Seven industrialised nations gathering in Washington on Friday.
